A Firm Has the Following Short Run Total Product Curve

question 36

Essay

A firm has the following short run total product curve:

where labor, L, is the only variable input and TP_L is the total output produced per day.
a. If the firm is operating in the short run with K fixed at K = 5, the average price for a unit of its output is $5.00, and average raw materials cost per unit is $3.00, what is the equation for the marginal revenue product of input L?
b. If the firm must pay a market-determined wage rate of $90.00 per day for each unit of labor hired, how much labor should it employ?
c. How many units of output will be produced per day? Fractional units are not permitted - round UP to the next whole unit.)
d. If the firm's daily fixed costs total $118.00, what will be its total profit per day?

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Definitions:

Blown Fuse Indicators

Devices that provide a visual or electronic signal indicating that a fuse has interrupted the circuit it protects due to an overcurrent condition.

Input Modules

Components of a control system that interface with and process signals from sensors or other input devices, converting them into a format suitable for the controller.

Analog Signals

Signals that vary continuously over time and can represent variables such as temperature, pressure, or velocity.

Two States

Typically refers to a system or component that has two distinct conditions, states, or values, commonly seen in digital or binary systems.